Clayton Denwood (left) and Chris Barrow of Bath Place Community Venture in the Old High Street area of Leamington Spa. Photograph: David Sillitoe for the Guardian

A charity is likely to have to move from the high street that it helped to win extra government cash to regenerate. Bath Place Community Venture (BPCV), which was the community lead partner in the bid for Leamington Spa to became a "Portas pilot" and win £100,000 to improve its old town, is being forced to vacate its premises in the heart of the rundown area to make way for the development of luxury flats.

Leamington Spa was one of 15 town centres awarded funding in July, following a review by television presenter and government retail adviser, Mary Portas, of how to revitalise troubled high streets. Some of the buildings in the old town have been empty for more than 20 years, and the focal point of the area is a grimy, disused railway bridge.

Bill Hunt, deputy chief executive at Warwick district council, who worked closely with the Leamington Spa team that developed the bid, says: "Bath Place Community Venture is an integral part of that team. But clearly there is a significant concern as to its future viability as an organisation, given its need to leave their current premises."

BPCV sees more than 500 visitors a week at the Old Library, which provides support and facilities for 40 community organisations, including Springfield Mind, Warwickshire probation service and the Leamington community kitchen, which provides free meals each Sunday.

Warwickshire College, which owns the Old Library, offered the facilities rent-free after BPCV's previous home was destroyed in a fire in 2009.

"[BPCV's] use was always understood to be a temporary 'stopgap' measure," says Chris Paget, executive director for asset development at Warwickshire College. He adds that the college needs to raise funds for "essential investment" in its "ageing buildings" at its Leamington Spa site.

Tag Exclusive Properties has submitted a planning application to convert the Old Library to 28 residential apartments. BPCV says it would have used the building to create a community hub to offer space to other charities and provide services focused on learning new job skills.

Chris Barrow, BPCV manager, says had the charity's lease been extended until legislation supporting the Localism Act was put in place later this year, then BPCV could have used the new Community Right to Bid clause to express interest in purchasing the building. If successful, it would have been given a few months in which to raise the necessary funds.

Both Warwickshire College and the district council have offered to help BPCV find a new site from which to continue to provide its charitable services. "We have always supported the Venture," says Paget, "and have offered ongoing help to them in looking for alternative premises and in applying for capital funding in support of their future."

Hunt adds that the council has offered to find BPCV a council-owned property or approach local landlords on the charity's behalf.

BPCV staff are pessimistic as to the likelihood of finding a building that can offer the same opportunities as the Old Library. "We're looking at alternative premises," says Barrow. "If we can find a new building, a larger building, then we will go for it, but it's unlikely. There's no building like this that could fulfil our wishes."

Clayton Denwood, BPCV's site manager, says any move will be detrimental to the charity's beneficiaries. "The important thing is the number of groups that will have no affordable place for their activities or enterprises," he says. "We're costing the taxpayer nothing but need the facilities with which to provide our service."

More than 1,700 visitors signed a petition to save the Old Library and BPCV, which was circulated earlier this year and has been sent to the district council and local MP Chris White. The petition points to a covenant from 1898 that dictates the Old Library should always remain a public building.

One signatory wrote: "Evicting Bath Place would rip the heart out of a community, uproot so many groups that simply have nowhere else to go, and cause further suffering for those who have already been through enough."

Despite the imminent upheaval, BPCV still plans to help with the regeneration of the old town. "Although there is a certain irony that our strong community presence was one of the factors in helping Leamington old town to secure the Mary Portas bid," says Barrow, "we will remain committed to contributing to regenerate this part of the town even after having to leave."